Saturday, October 13, 2012

Romney tax still does not work...

The 6 Studies Paul Ryan Cited Prove Mitt Romney's Tax Plan Is Impossible - Matthew O'Brien - The Atlantic

Isn't it a bit puzzling that all Romney and Ryan do is keep repeating that their tax plan can work, and it would seem enough swinging voters are starting to believe them?   Mind you, unless voters go reading elsewhere, all they are getting in the debates seems to be "your plan can't work mathematically" versus "yes it can".

But as the article explains above, the main factor for arguing that maybe Romney's plan can work would be by factoring in strong growth.   Yet here is what the (key defender) Rosen paper (you can find it via the main link) actually says on what can be expected regarding growth (click on it to make it bigger):

That's it?    "No one knows for sure".    And all it seems that Rosen was out to show was that Romney's claim (of being able to knock out enough deductions in a way that won't hurt the middle class yet reduce everyone's tax) was not mathematically impossible.

Let's put it this way:  the best Romney and Ryan can really claim is - we have someone who says our plan might not be impossible - but even then, he doesn't know for sure.

(And, by the way, Rosen's assessment is strongly criticised as flawed for other assumptions too.)

Backing that Rosen's "no one knows for sure" statement was the recent release of a Congressional research paper concluding there is no clear connection between past tax cuts and growth at all.   This article notes that as early as late 1980's, Reagan's own economics adviser had acknowledged academically that he had no evidence that cuts to personal income tax had had any effect on growth.  I like the way the last mentioned article ends:
At some point, when observed reality keeps differing from predicted reality, it makes sense to examine your predictions. That is not what’s happening. This particular Republican argument continues to rest on a prediction—and because the test of any prediction lies somewhere out there in the awesome future, it can never be refuted. Lower income taxes and the economy will grow: It’s a unicorn of an idea, always feeding in the next meadow.

And if you want more loads of links to economists who have said there is no clear connection between past tax cuts and growth (or, at the very least, you have to look at what tax cuts achieved in the context of everything else that was going on economically at the time) have a look at this lengthy post at MediaMatters. 

There seems no doubt to me at all that the Republican's economic policy should simply be re-titled "The Return of Voodoo Economics". 

I am no economist, but I can read.   I just can't see how the criticisms of the Romney/Ryan tax plan are wrong.  American voters need to read a bit more, too.

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